CALGARY, Aug. 8, 2008 (Canada NewsWire via COMTEX) ----Guest-Tek Interactive Entertainment Ltd. ("Guest-Tek" or the "Company") (TSX:GTK), a leader in providing broadband technology solutions to the global hospitality industry, announced today that in the three months ended June 30, 2008, the Company has recorded its lowest net loss since the three months ended June 30, 2005. In addition, the Company has achieved the second consecutive quarter of positive adjusted EBITDA(1) and adjusted EBITDA growth. The Company's interim consolidated financial statements for the three months ended June 30, 2008 ("first quarter, Fiscal 2009," "Q1, 2009" or "Q1, Fiscal 2009"), along with the related notes and Management's Discussion and Analysis can be found on www.sedar.com.

Arnon Levy commented, "Our core OneView Internet product continues to bring new revenue to the business and the growth of the OneView Media platform is setting the stage for longer term growth. I am very pleased to report our second consecutive quarter of positive adjusted EBITDA, which is a reflection of the growth of the OneView platform customer base and our ongoing management of cost of revenue and operating costs."

The Company's performance for the three months ended June 30, 2008 showed significant improvement over the three months ended June 30, 2007 ("first quarter, Fiscal 2008," "Q1, 2008" or "Q1, Fiscal 2008"). Revenue for Q1, 2009 was $9.89 million compared to $8.98 million for Q1, 2008. The Company also saw an improvement in gross margin in Q1, 2009 compared to Q1, 2008. Gross margin as a percentage of sales increased to 42.0% in Q1, Fiscal 2009 compared to 39.7% in Q1, Fiscal 2008. Operating expenses remained consistent at $4.67 million in Q1, Fiscal 2009 compared to $4.64 million in Q1, 2008. Net loss decreased significantly, to $389 thousand for Q1, 2009 compared to $720 thousand for Q1, 2008. Adjusted EBITDA improved to $146 thousand in Q1, 2009 from negative $166 thousand in Q1, 2008.

 << -----------------------------------
   (1) Adjusted EBITDA is earnings before interest, taxes, depreciation, amortization, gain or loss on sale of assets and stock
   based compensation expense and is provided to assist investors in assessing the Company's performance. Adjusted EBITDA has
   no standardized definition in Canadian GAAP and therefore may not be comparable to similar measures presented by other companies.
   Management believes that Adjusted EBITDA, in addition to net income, is a useful indication of performance and the Company's
   ability to generate cash from operations. Please see the reconciliation of Adjusted EBITDA to net income included in the Company's
   MD&A for the period ended June 30, 2008. Significant events for the quarter include: - 86 OneView Internet ("high-speed
   Internet access" or "HSIA") properties upgraded under an agreement with Tharaldson Property Management Inc. to upgrade networks
   and install OneView Internet at 371 properties; - Installed OneView Internet at Centre Parcs Elveden Forest in the UK, and
   signed an agreement to install OneView Internet at a third Centre Parcs, Longleat; - Installed OneView Internet at The Lodge
   at Pebble Beach, The Inn at Spanish Bay, and Casa Palmero at Pebble Beach in California; - Completion of OneView Media video-on-demand
   ("VOD") and Internet protocol television ("IPTV") at the The Water Club, A Signature Hotel by Borgata in Atlantic City, New
   Jersey; - Commencement of help desk capability based in Guatemala, in an effort to reduce cost and align working hours with
   busy times at the majority of Guest-Tek's room base; - Installation of OneView Internet in 13,976 rooms, with a total supported
   base of 505,571 rooms; and - Installation of 365 OneView Media rooms, with a total service base of 5,601 rooms. >> 

Revenue

Overall, revenue increased 10.2% to $9.89 million for Q1, Fiscal 2009 from $8.98 million for Q1, 2008. Revenue decreased 10.8% from $11.09 million recorded in Q4, 2008. The increase in revenue compared to the same quarter a year ago is due to an increase in the demand for both HSIA installations and VOD. The decrease in revenue compared to Q4, 2008 is due to an unusually large HSIA installation in that quarter.

Gross Margin

Gross margin as a percentage of revenue increased to 42.0% in Q1, Fiscal 2009 from 39.7% in Q1, Fiscal 2008, and increased from 32.8% in Q4, Fiscal 2008. The increases in gross margin as a percentage of revenue are attributable to a reduction in cost of revenue.

Operating Expenses

Total operating expenses increased 0.6% to $4.66 million for Q1, Fiscal 2009, compared to $4.64 million for Q1, Fiscal 2008, and decreased 15.8% from $5.54 million for Q4, 2008. The significant decrease in operating expenses compared to Q4, 2008 is due to a decrease in intangible asset write-downs ($1.19 million in Q4, 2008 compared to $nil in Q1, 2009). Operating expenses as a percentage of revenue were 47.1% for Q1, Fiscal 2009 compared to 51.6% for Q1, Fiscal 2008 and compared to 50.0% for Q4, 2008.

About Guest-Tek

Guest-Tek is the world's largest provider of IP based technology solutions for the hospitality industry. Guest-Tek's OneView platform provides hotels with converged data, video and telephony services. Guest-Tek is a preferred vendor to major hotel brands, providing services including network design, procurement, implementation, and post sales customer support to 2,879 properties and over 505,000 rooms. Guest-Tek's common shares trade on The Toronto Stock Exchange under the trading symbol "GTK". The company's head offices are in Calgary, Alberta, and it has major support facilities in Irvine, California, and Warsaw, Poland as well as Sales offices located throughout North America and Europe. For more information about Guest-Tek, go to www.guest-tek.com.

The above disclosure contains certain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond Guest-Tek's control, including: the impact of general economic conditions, industry conditions, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to the announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. Guest-Tek's actual results, performance or achievement could differ materially from those expressed in, or implied by these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits, including the amount of proceeds, that Guest-Tek will derive therefrom.

 <<
   GUEST-TEK INTERACTIVE ENTERTAINMENT LTD. Consolidated Balance Sheets (Unaudited) June 30, 2008 and March 31, 2008 -------------------------------------------------------------------------
   June 30, 2008 March 31, 2008 ------------------------------------------------------------------------- Assets Current assets:
   Cash and cash equivalents $ 1,897,085 $ 2,956,869 Accounts receivable 8,327,070 8,665,885 Installations in progress 1,687,867
   1,801,107 Inventory 1,959,220 1,257,983 Prepaid expenses and deposits 1,225,235 1,495,486 -----------------------------------------------------------------------
   15,096,477 16,177,330 Property and equipment 4,253,220 4,412,159 Deferred costs 5,107,191 4,566,026 Intangible assets 4,264,587
   4,371,999 Goodwill 11,768,224 11,768,224 ------------------------------------------------------------------------- $ 40,489,699
   $ 41,295,738 ------------------------------------------------------------------------- -------------------------------------------------------------------------
   Liabilities and Shareholders' Equity Current liabilities: Accounts payable and accrued liabilities $ 6,074,524 $ 6,527,165
   Customer deposits 5,673,717 6,085,687 Deferred revenue 680,796 592,800 Current portion of notes payable 86,406 128,895 -----------------------------------------------------------------------
   12,515,443 13,334,547 Deferred revenue 2,962,292 2,496,438 Deferred leasehold inducement 91,393 121,843 Notes payable 1,778,733
   1,743,276 Future tax liability 923,021 1,049,660 Shareholders' equity: Share capital 53,779,555 53,779,555 Contributed surplus
   2,969,930 2,912,440 Deficit (34,530,668) (34,142,021) -----------------------------------------------------------------------
   22,218,817 22,549,974 ------------------------------------------------------------------------- $ 40,489,699 $ 41,295,738
   ------------------------------------------------------------------------- -------------------------------------------------------------------------
   GUEST-TEK INTERACTIVE ENTERTAINMENT LTD. Consolidated Statements of Operations, Comprehensive Loss and Deficit (Unaudited)
   Three months ended June 30, 2008 and 2007 ------------------------------------------------------------------------- 2008 2007
   ------------------------------------------------------------------------- Revenue (note 6) $ 9,893,255 $ 8,979,029 Cost of
   revenue 5,735,858 5,410,417 ------------------------------------------------------------------------- Gross margin 4,157,397
   3,568,612 Operating expenses: Selling, general and administrative 3,739,086 2,997,398 Research and development 201,155 384,214
   Amortization of property and equipment 304,953 499,970 Amortization of intangible assets 170,285 283,392 Amortization of internally
   developed software 75,327 68,986 Foreign currency loss 70,697 353,298 Stock based compensation 57,490 46,308 Interest expense
   45,524 2,490 ----------------------------------------------------------------------- 4,664,517 4,636,056 -------------------------------------------------------------------------
   Loss before interest income and income taxes (507,120) (1,067,444) Interest income 2,565 7,807 -------------------------------------------------------------------------
   Loss before income taxes (504,555) (1,059,637) Income tax recovery (115,908) (339,144) -------------------------------------------------------------------------
   Net loss and comprehensive loss (388,647) (720,493) Deficit, beginning of period (34,142,021) (28,861,726) -------------------------------------------------------------------------
   Deficit, end of period $ (34,530,668) $ (29,582,219) -------------------------------------------------------------------------
   ------------------------------------------------------------------------- Net loss income per share: Basic $ (0.02) $ (0.03)
   Diluted (0.02) (0.03) Weighted average number of shares: Basic 15,825,852 15,823,493 Diluted 15,840,265 15,825,136 -------------------------------------------------------------------------
   ------------------------------------------------------------------------- >> 

%SEDAR: 00020221E

SOURCE: Guest-Tek Interactive Entertainment Ltd.

Arnon Levy, President & CEO, Guest-Tek, (403) 444-8488, arnon.levy@guest-tek.com;
   Geoff Clark, CFO, Guest-Tek, (403) 444-8427, geoff.clark@guest-tek.com 

Copyright (C) 2008 CNW Group. All rights
   reserved.